Total monthly PMI payment:(0.9% a year on $120000 loan, since your downpayment was 0%)

$

90

35% Qualifying income:

$

33274.97

45% Qualifying income:

$

25880.53

Explanation

PMI appears above if your down payment is less than 20% of your home
value. That means you must pay an extra .32% to .90% a year until you break the 20%
criteria. They also add that into the income requirement.

The Front End Ratio (35%) income is
based on PITI (Principal + Interest + Tax + Insurance) or more specifically, the mortgage
principal plus interest amount plus your monthly property tax and home insurance the
lender typically holds in an escrow account for you. This monthly amount is listed above
as Total monthly lender payment.

The Back End Ratio (45%) income is
based on the PITI (Principal + Interest + Monthly Property Tax + Monthly Home Insurance
+ Monthly Debt). This total amount is the sum described above as Total monthly debt payment.

As long as your total income (salary + interest income + rental income + dividend
income) meets ONE of the two incomes you will probably qualify, and
if it meets both you are in even better shape.